Thursday, October 9, 2014

LET RESILIENCE BE YOUR GUIDE. THOUGHTS ON RISK, TRAVEL AND INVESTING.

If you are thinking of speculating in foreign stocks or leisure traveling in another land, you might consider the FM Global Resilience Index by property risk insurer FM Global as your guide.

Analysts at FM Global evaluate the ability of a people within their country to recover from disruptive events based on their current state. Analysts combine proprietary data from more than 100,000 commercial properties worldwide along with published data from the International Monetary Fund (GDP), the U.S. Energy Information Administration (oil), the World Bank (political risk, corruption control) and the World Economic Forum (infrastructure, supplier worthiness).

To come up with their ranking, analysts look at the likelihood for natural disasters as well as negative political events. Then analysts weigh factors such as the dependency on foreign oil, state of political stability, political corruption, state of economy, and state of infrastructure. Analysts combine these factors to form a score from 0 to 100, with 0 signifying lowest resilience and 100, highest resilience.

According to the exec summary, "Countries with strong economies, high-quality infrastructures and a high level of risk quality [standards] score well. This is why Norway, Switzerland and Canada appear in the top three slots."

Let's face it. Whether you are traveling, speculating or investing, it comes down to these: politics — terrorism, war, leadership instability, sudden political regulation, graft — and the earth — storms, earthquakes, volcanic eruptions, wildfires, drought, heat waves, floods. Would you like to get stuck in a country with no recourse or no way to save you once you put your past-earned profit or yourself at risk?